Ghuman et al Indictment

42 Pages·2013·0.1 MB·English

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION

UNITED STATES OF AMERICA )

)
vs. ) No.
)
CHARNPAL GHUMAN, ) Violations: Title 18, United States
AGA KHAN, ) Code, Sections 1344 and 215; and
AKASH BRAHMBHATT, and ) Title 26, United States Code, Section
SHITAL MEHTA ) 7206(1)

COUNT ONE
The SPECIAL SEPTEMBER 2012 GRAND JURY charges:
1. At times material to the indictment:
a. American Enterprise Bank was a financial institution, the deposits of which
were insured by the Federal Deposit Insurance Corporation. American Enterprise Bank was in
the business of, among other things, providing loans to applicants who satisfied certain
qualifications.
b. The Small Business Administration was a quasi-governmental agency
whose mission was to promote development of small businesses. As part of that mission, the
SBA guaranteed certain loans up to a percentage of the loan if the loan applicant satisfied certain
qualifications and rules of the SBA.
c. The SBA authorized American Enterprise Bank to act as a Preferred
Lending Provider for business loans guaranteed in part by the SBA, which allowed American
Enterprise Bank to process SBA loans on its own if the loan satisfied SBA qualifications and rules.
As a result, American Enterprise Bank offered loans guaranteed in part by the SBA to certain loan
applicants who qualified for such loans under SBA rules.
d. American Enterprise Bank and the SBA required applications for loans to
provide truthful information, including the borrower’s name and other identifiers, employment
background, income, assets and liabilities, which information was material to the approval, terms,
and funding of loans. Specifically, the SBA loan application required a certification that all
information in the application and exhibits was true and complete to the best of the borrower’s
knowledge, and each loan form contained a warning against false statements. The Statement of
Personal History form provided by the SBA for loan applications contained a warning against
making false statements on the form, and cautioned that false statements violated federal law.
The Personal Financial Statement form provided by the SBA for loan applications stated that the
signature of the borrower certified that the statements contained in the document were true and
accurate and that false statements may result in possible prosecution.
e. The SBA also required that borrowers of SBA loans invest a reasonable
amount of equity in the business, to be determined through the loan process, rather using an SBA
loan to provide 100% financing of the business.
f. CHARNPAL GHUMAN and AGA KHAN are individuals who, through
various entities set forth below, all co-owned and controlled by GHUMAN and KHAN, sold and
caused to be sold gas stations to purchasers financed by loans processed by American Enterprise
Bank and guaranteed in part by the SBA.
g. AKASH BRAHMBHATT was a loan officer at American Enterprise Bank
who handled the applications and processing of SBA loans for purchasers of gas stations owned by
entities controlled by GHUMAN and KHAN.
h. SHITAL MEHTA was an accountant who was engaged in providing advice
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and documents for a variety of accounting, tax and corporate functions, including the preparation
and filling of incorporation documents, the preparation and filing of sales tax returns, and the
preparation and filing of corporate and individual tax returns.
2. Beginning no later than in or about 2006 and continuing to at least in or about 2009,
in the Northern District of Illinois, and elsewhere,
CHARNPAL GHUMAN,
AGA KHAN,
AKASH BRAHMBHATT and
SHITAL MEHTA,
defendants herein, knowingly devised and participated in a scheme to defraud and to obtain money
and funds owned by and under the custody and control of American Enterprise Bank, by means of
materially false and fraudulent pretenses, representations and promises, which scheme is further
described in the following paragraphs.
3. It was part of the scheme that GHUMAN and KHAN recruited purchasers for the
gas stations that they jointly owned, and arranged for the purchasers to finance the deals, in total
exceeding $l0,000,000 in SBA-guaranteed loans, from American Enterprise Bank through
BRAHMBHATT, based on false representations, including false tax returns prepared by MEHTA.
4. It was further part of the scheme that, where a purchaser of a gas station did not
have an acceptable credit record to qualify for all or part of the SBA loan, GHUMAN, KHAN and
BRAHMBHATT arranged for the loans to be made in whole or in part in the name of the
purchaser’s family member or friend who had acceptable credit records, even though GHUMAN,
KHAN and BRAHMBHATT knew that the family member or friend was not the purchaser of the
gas station, and did not intend to have any role in the gas station business or in repayment of the
loan proceeds. As a result, American Enterprise Bank did not know the true extent of the actual
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purchaser’s loan obligations, which was material to the approval, terms, and funding of loans.
5. It was further part of the scheme that GHUMAN, KHAN and BRAHMBHATT
caused materially false and fictitious information and documents to be submitted to American
Enterprise Bank on behalf of the purchasers of GHUMAN’s and KHAN’s gas stations, which
information and documents were material to the approval, terms, and funding of loans, so that the
loans would be approved and the loan proceeds would be paid to GHUMAN and KHAN. This
false information and documentation included, among other things:
a. false information about employment, income, assets and liabilities;
b. false income tax returns; and
c. false information about the purchasers’ contribution of equity, by making it
appear that the purchasers had contributed equity to the purchase as required by the SBA, when in
fact the purchasers had not contributed equity.
6. It was further part of the scheme that MEHTA prepared false tax returns for
purchasers, showing income in an amount calculated to qualify for the loans, which MEHTA knew
to be false, and which MEHTA submitted and caused to be submitted to BRAHMBHATT at
American Enterprise Bank, for the purpose of becoming a material part of the loan application
package.
7. It was further part of the scheme that GHUMAN, KHAN and BRAHMBHATT
arranged for American Enterprise Bank to pay broker’s fees to KHAN’s brother, for work
purportedly performed in connection with certain loans made by American Enterprise Bank to
purchasers of gas stations owned by GHUMAN and KHAN, even though GHUMAN, KHAN and
BRAHMBHATT knew that KHAN’s brother did not perform any work in connection with those
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loans.
8. It was further part of the scheme that GHUMAN and KHAN gave, offered and
promised things of value to BRAHMBHATT, including cars, with the intent to influence and
reward BRAHMBHATT, as an employee and agent of American Enterprise Bank, for his
assistance in processing the fraudulent loans.
9. It was further part of the scheme that GHUMAN, KHAN, BRAHMBHATT and
MEHTA caused American Enterprise Bank to issue loans based on fraudulent applications in
excess of $10,000,000.
10. It was further part of the scheme that the loan proceeds were paid to GHUMAN and
KHAN as payment for gas stations owned by entities controlled by GHUMAN and KHAN, with
loan proceeds frequently deposited into bank accounts jointly controlled by GHUMAN and
KHAN.
Ish Petroleum Loans
11. It was further part of the scheme that on or about April 19, 2007, GHUMAN and
KHAN, acting as the principals of Infinite Gas Fifteen and Infinite Gas Sixteen, sold and caused to
be sold to Individual A two gas stations located in Macomb, Illinois, and arranged for
BRAHMBHATT to process SBA loans through American Enterprise Bank to fund Individual A’s
purchase of the gas stations, even though GHUMAN, KHAN and BRAHMBHATT knew that
Individual A did not qualify for SBA loans. GHUMAN, KHAN and BRAHMBHATT arranged
for American Enterprise Bank to fund the purchase for the two gas stations through two loans, both
made to an entity called Ish Petroleum, with both loans guaranteed by Individual A.
12. It was further part of the scheme that GHUMAN and BRAHMBHATT submitted
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and caused to be submitted to the American Enterprise SBA loan file for Ish Petroleum a copy of
two checks, in the amounts of $175,000 and $170,000, to falsely represent equity contributed by
Individual A for the purchase of these two gas stations, knowing those checks were drawn by the
sellers, the original checks were never provided to American Enterprise Bank or any other entity in
connection with the purchase of the gas stations, and Individual A never tendered these checks or
made any equity contribution to the purchase of the gas stations.
13. It was further part of the scheme that GHUMAN and BRAHMBHATT arranged
for letters to be provided to American Enterprise Bank to document that Individual A had been
provided funds as a gift for the purpose of paying the required equity contribution for the Ish
Petroleum loans, when such documentation was false.
14. It was further part of the scheme that GHUMAN and BRAHMBHATT arranged
for, created and submitted false application documents for the loans, knowing that such documents
were false and intending for American Enterprise Bank to rely on such documents in approving
and funding the loans. Such documents included false Personal Financial Statements for
Individual A, which overstated the amount of cash available to Individual A, and false Statements
of Personal History and false Management Resumes for Individual A, which overstated and
misrepresented Individual A’s experience.
15. It was further part of the scheme that the loan proceeds, which exceeded
$1,000,000, were used to pay for gas stations owned by entities controlled by GHUMAN and
KHAN, and that the proceeds from the loans were deposited into bank accounts jointly controlled
by GHUMAN and KHAN.

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Z&S Loans
16. It was further part of the scheme that on or about September 20, 2007, GHUMAN
and KHAN, acting as the principals of Infinite Oil, sold and caused to be sold to Individual B three
gas stations, two located in Rock Island, Illinois and one located in Silvis, Illinois. GHUMAN
arranged for BRAHMBHATT to process SBA loans through American Enterprise Bank to fund
Individual B’s purchase of the gas stations, even though GHUMAN and BRAHMBHATT knew
that Individual B did not qualify for SBA loans.
17. It was further part of the scheme that GHUMAN and BRAHMBHATT arranged
for the purchase funds for the three gas stations to be provided by American Enterprise Bank in
three loans, all made to an entity named Z&S Corp., with each of the loans guaranteed by
Individuals B and C, even though GHUMAN and BRAHMBHATT knew that Individuals B and C
did not qualify for the SBA loans, and that Individual C did not intend to have any role in the gas
station or in repaying the loans.
18. It was further part of the scheme that GHUMAN and BRAHMBHATT arranged
for, created and submitted false documents for the loans, knowing that such documents were false
and intending for American Enterprise Bank to rely on such documents in approving and funding
the loans. Such documents included false Personal Financial Statements, false Statements of
Personal History and false Management Resumes, and false bank statements for Individual B and
Individual C. These documents contained materially false statements made to American
Enterprise Bank for the purpose of fraudulently obtaining three SBA loans for Individual B to
purchase the three gas stations.
19. It was further part of the scheme that MEHTA, at the request of GHUMAN and
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BRAHMBHATT, prepared tax returns containing false statements of income for Individual B and
Individual C, and MEHTA submitted and caused to be submitted these false tax returns to
American Enterprise Bank for the purpose of having the loans approved by American Enterprise
Bank, knowing that the returns contained false statements and that such false statements were
material to the approval, terms, and funding of loans by American Enterprise Bank.
20. It was further part of the scheme that GHUMAN and BRAHMBHATT submitted
and caused to be submitted to the American Enterprise Bank SBA loan file for Z & S Corp. a copy
of two checks, in the amounts of $150,000 and $250,000, to falsely represent equity contributed by
Individual B and Individual C for the purchase of the three gas stations, knowing those checks
were drawn by the sellers, the original checks were never provided to American Enterprise Bank
or any other entity in connection with the purchase of the gas stations, and neither Individual B nor
Individual C provided these checks or any equity for the purchase of the gas stations.
21. It was further part of the scheme that the loan proceeds, which exceeded
approximately $1.8 million, were used to pay for gas stations owned by entities controlled by
GHUMAN and KHAN, and that the proceeds from the loans were deposited into bank accounts
jointly controlled by GHUMAN and KHAN.
Elite Petroleum Loans
22. It was further part of the scheme that between in or about October 2007 and
December 2007, defendants GHUMAN and KHAN, acting as the principals of Iowa Gas, sold and
caused to be sold to Individual A eight gas stations located in Iowa, and that GHUMAN arranged
for BRAHMBHATT to process SBA loans through American Enterprise Bank to fund Individual
A’s purchase of the gas stations, even though GHUMAN and BRAHMBHATT knew that
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Individual A did not qualify for SBA loans. GHUMAN and BRAHMBHATT arranged for the
purchase funds for the eight gas stations to be provided by American Enterprise Bank in eight
loans, made to entities named, sequentially, Elite Fuel One through Elite Fuel Eight. In order to
hide that all eight loans were being made for the purchase of gas stations by Individual A,
BRAHMBHATT and GHUMAN arranged for Individual A to act as the applicant for the loan to
Elite Fuel One, and for Individual A’s relatives and friends to act as applicants for seven other
loans, even though GHUMAN and BRAHMBHATT knew that the purpose of all eight loans was
for Individual A to purchase the eight gas stations, the applicants for loans to Elite Fuel Two
through Elite Fuel Eight were not actually purchasing the gas stations, and the applicants for loans
to Elite Fuel Two through Elite Fuel Eight, like Individual A, were not qualified to obtain the
loans, and would have no role in repaying the loans.
23. It was further part of the scheme that GHUMAN and BRAHMBHATT arranged
for, created and submitted false application documents for the loans, knowing that such documents
were false and intending for American Enterprise Bank to rely on such documents in approving
and funding the loans. Such documents included false Personal Financial Statements, false
Statements of Personal History and false Management Resumes for the Elite Fuel loan applicants.
These documents contained materially false statements made to American Enterprise Bank for the
purpose of fraudulently obtaining eight SBA loans for Individual A to purchase eight gas stations
in Iowa from entities controlled by GHUMAN and KHAN.
24. It was further part of the scheme that MEHTA, at the request of GHUMAN and
BRAHMBHATT, prepared tax returns containing false statements of income for Individual A and
certain of Individual A’s relatives and friends who were acting as applicants for loans, and
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MEHTA submitted and caused to be submitted these false tax returns to American Enterprise
Bank for the purpose of having the loans approved by American Enterprise Bank, knowing that the
returns contained false statements and that such false statements were material to the approval,
terms, and funding of loans by American Enterprise Bank.
25. It was further part of the scheme that GHUMAN and BRAHMBHATT submitted
and caused to be submitted false documentation of borrowers’ equity contributions for certain
Elite Fuel loan applications, each of which was material to the approval and funding of the
respective loan, as follows:
a. GHUMAN and BRAHMBHATT submitted and caused to be submitted to
the American Enterprise Bank SBA loan file for Elite Fuel One a copy of a check for $115,000, to
falsely represent equity contributed by the borrower, knowing that check was drawn by the seller,
the original check was never tendered to American Enterprise Bank or any other entity in
connection with the purchase of the gas station, and the borrower never contributed any equity
toward the purchase;
b. GHUMAN and BRAHMBHATT submitted and caused to be submitted to
the American Enterprise Bank SBA loan file for Elite Fuel Three a copy of a fake and altered
check in the amount of $100,000, to falsely represent equity contributed by the borrower, knowing
that check was drawn by the seller, the original check was never tendered to American Enterprise
Bank or any other entity in connection with the purchase of the gas station, and the borrower never
contributed any equity toward the purchase;
c. GHUMAN and BRAHMBHATT submitted and caused to be submitted to
the American Enterprise Bank SBA loan file for Elite Fuel Four a copy of a fake and altered check
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